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Sole Proprietorship without a Will (intestacy) creates Significant Demands
There can be some very serious, and unwanted, consequences that arise from dying without a valid will, which demands your immediate attention.
To schedule an appointment, contact our law firm at 403-400-4092 or Chris@NeufeldLegal.com
When an individual owns a sole proprietorship (as opposed to having operated their business through a corporation or partnership) and dies without a valid will (intestate), there are significant challenges associated with both administrating the estate, as well as dealing with the sole proprietorship (that effectively ceases to exist). The Administrator (or Personal Representative) who is charged with administering the decedent's estate, must be prepared for the added demands and complexity that arises from dealing with the sole proprietorship that needs to be promptly liquidated and the proceeds distributed as part of the total estate.
Unlike a corporation, a sole proprietorship is legally indistinguishable from the person, presenting a particular legal challenge when that person is deceased and has died without a will (intestate). In such circumstances, the Administrator must recognize the constraints as to their administration of the sole proprietorship, including:
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Asset Liquidation: All the business assets (inventory, equipment, bank accounts, receivables, and debts) are legally part of your estate. The Administrator has a duty to wind up the business promptly and convert its assets into cash for distribution to your heirs.
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Continuation is Limited: Unlike with a will, where an executor can be given explicit power to continue running a business, the Administrator generally does not have the authority to continue operating the sole proprietorship for any extended period unless authorized by the court.
As such, leaving behind your business and your inheritance without a valid will has the potential for numerous consequences, many of which could either be avoided in their entirety or significantly limited by having a valid will, which was supported by appropriate estate planning in advance of one’s death. Avoid putting your loved ones in the difficult situation of attempting to settle and administer your estate without a valid will, especially where you operate your own business as a sole proprietorship, by putting in place the necessary estate planning documents when you are alive and capable. Contact our law firm today at 403-400-4092 or via email at Chris@NeufeldLegal.com to schedule a confidential initial consultation.
IMPORTANT NOTE: This website is designed for general informational purposes. The site is not designed to answer specific questions about your individual situation or entitlement. Do not rely upon the information provided on this website as legal advice in respect of your individual situation nor use it as substitute for individual legal advice. If you want specific legal advice, you need to engage a lawyer under established legal engagement procedures that have been specifically agreed to by that lawyer.
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